Is it possible to use real estate as a catalyst for attractive returns and meaningful social impact? 

On this episode of Accessing the Pipeline, McGuireWoods attorneys Dan Howell and PJ Harris talk with Chris Grant, the founder of Yoke Management Partners. Yoke Management Partners is a diversified real estate investment firm with a focus on affordable housing in the DMV—whose mission is to generate the best returns and have a positive social impact on the community.

Tune in as Chris talks about the ins and outs of being an emerging manager including, his founder story, the challenges of the current real estate market, his journey in fundraising, the importance of alignment, and how Yoke Management Partners is executing its mission to generate returns and community impact. 

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This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action.

This is Accessing the Pipeline, a podcast for Black professionals in private equity and finance, brought to you by McGuireWoods. Each episode features special guests offering insights into accessing capital, developing and expanding relationships, opportunities, and driving growth for Black owned businesses. Tune in to access the possibilities.

All right, welcome to Accessing the Pipeline. My name is PJ Harris and I'm an M&A associate here at McGuireWoods. Please join me and McGuireWoods partner, Dan Howell, who's also in our mergers and acquisitions practice, in welcoming our guest, Chris Grant of Yoke Management Partners based in Washington DC.

Yeah, nice to meet you, Chris. My name is Dan Howell. I'm an M&A partner in the Richmond office of McGuireWoods, and looking forward to this conversation.

Absolutely, Dan, it's a pleasure to be on this podcast with you all. It's been incredible to just listen in so far and learn a ton from the other episodes you all have already produced and put together, so I'm very excited and honored to be here today.

We're very excited and honored to have you. So just getting right into it, Chris, let's start by talking about your background and what led you to starting your own investment firm.

Yeah, so I'm Chris Grant, born and raised in Baltimore, Maryland. I wound up going to University of Maryland College Park for undergrad, and when I was young, I had no basically perspective of things outside of my own community. So going to Maryland felt like a stretch for me. Going to Maryland gave me a chance to really grow as a person, and I wound up studying accounting and finance when I was in school, but really loved the experience overall. Upon graduation, I moved to Washington D.C and started a job at a boutique advisory firm that was founded by Gene Ludwig, who was the comptroller of currency during Bill Clinton's administration. And we helped banks with regulatory problems. Since he was a major bank regulator and we had, I guess, advisory practice helping banks, I got a chance to learn a ton about just financial services broadly, about some emerging risk in the system and the Dodd-Frank Act was being implemented after the great financial crisis.

So all of those experiences were really good and helpful for me. But about four years into that experience, Promontory got acquired. Promontory got acquired in one part to IBM, then later on, Gene sold the other business within Promontory to Blackstone. But during that whole M&A process, I decided, let me reflect on what I had learned and experienced so far and figure out what do I really want out of my own professional career. And that led me to apply to business school. I moved to California and got a chance to go to Stanford. Stanford was an amazing experience for me because it gave me a chance to really stretch and grow differently. I had always been straight A, type of student through high school and even in college. And then I'm at Stanford and I'm just with people who are just so exceptional in so many different ways.

And it really gave me a chance to figure out, what is my unique value? What do I bring to the marketplace broadly and how do I want to show up in my career? And it gave me a chance to come up with my own thesis for myself. And the sentence I came up with was, how can I help increase access to capital and opportunity to communities that matter most to me? I realized there, my first day on campus, I think I had a bag that had the Baltimore Orioles logo on it. And so someone came up to me and immediately recognized I had a connection to Baltimore. And so from there, I just realized that I had a way to connect with a ton of people, by learning more about their local environment, their local neighborhoods. And being the Baltimore guy stuck with me a lot when I was in school there.

But after business school, you drink the entrepreneurial Kool-Aid as well when you're out there. And I got a lot of time to think about what it could look like for me to do something on my own one day. And I immediately took a job working at a real estate private equity firm that was focused on an opportunities-owned strategy. We had three multi-asset blind pool funds, one that was a city-based fund, a state-based fund, and then later on, we created a regional fund and I was in charge of our Baltimore effort. It was great because it gave me a chance immediately after school to go back to my hometown, really set up shop and start doing business locally and from there and after a few deals and a few years, ultimately made the decision that I wanted to branch out on my own, and Yoke was born at that point.

That's awesome. That's really helpful background for the audience to understand about what's important to you. And I particularly like the local focus and the desire to get back to your hometown, your home region, and clearly you were successful in doing that. And so sort of building off of that, just curious, what were some of the early indicators that you were ready to strike out on your own? Certainly early in your career, you had a number of external indicators such as being named Forbes 30 under 30 list for finance in 2021 and more recently, Yoke's Acceptance into the 2024 diverse and emerging sponsor cohort at Freddie Mac. So in addition to those external factors, what were some internal or market indicators that you were ready to strike out and the time was right for what you had to bring to the table?

Yeah, I think I know I spent a ton of time wrestling through the idea internally on if I was ready or not to go branch out on my own and take the leap. And I felt like the external validators, I had some of those validators there that helped signal the fact that I could go out and do something and potentially garner some trust and confidence and respect from the people I would need to work with. But I still struggled with that to figure out when would be the right time to make that jump. I would say on the personal side, I have a two and a half year old daughter, and my daughter probably was the real push for me to go out and say, do it. I had just started to feel like if I don't do it, I probably won't ever do it, so let me just go do it now right when she's a baby and figure out where this could take me.

Because if it doesn't work, she won't remember. And if it does work, she'll be really excited about it. So I always think about it that way. And I would say so personally, I spent time thinking on that piece and then the market was at an interesting time. So you think two and a half, three years ago, we were kind of coming out of Covid and coming out of just the whole pandemic life and what it meant to business. A couple things happened during that time. One thing in particular was, I would call it the Racial Justice movement, Black Lives Matter movement, all in the aftermath of deaths of so many people like George Floyd. And you saw a lot of corporations basically making commitments for racial equity investments. So when I saw that happen in the marketplace and it looked like there was more capital actually being allocated to support managers that look like me, that gave me a little bit of confidence that maybe it was a good time to potentially try something on my own.

Secondly, from a market standpoint, I had spent time working at the firm, Blueprint Local, where I was doing opportunity zone investments, and we had some success. We really were doing great things. I was a part of the team and really helped structure a deal in Baltimore. We're actively redeveloping the Baltimore train station, the Penn station. But what I started to notice too during that time with the Opportunity Zone program was it had a lot of hype. A lot of people were super excited about it, dollars were moving into it, but then it was slowing down a little bit.

And so I started thinking a bit about what does that mean over the long term and what does that mean for me in my career and how I think about what investment strategy I wanted to pursue. And so I started to write that investment strategy and found a deal. And honestly, when I found a deal that I thought made sense and it was exciting coupled with the fact that my daughter was about to be born and everything on that front, I thought, "You know what? This is a good time to just take that leap and go for it."

Awesome. I'm glad I'm finally getting the opportunity to ask you this next question because I've always been curious about it. So you've told us about how you came up with your investment strategy and your mission statement, but can you speak a little bit to how you came up with the name Yoke?

Yeah, sure. So obviously in investing, there's a lot of people involved. This is a capital intensive business and it takes a team to pull something together. And one thing that you also realized, or something I realized was that, there's investor priorities that can align or not align with your own priorities. And that can go with not just your investment partners, but that can go with the clients that you may work with on the ground if it is your tenants or if it is your vendors. So one thing that I wanted to do is have a business that reminded me all the time to focus on alignment. I had a professor once that said, "Alignment beats strategy any day." And for some reason that quote stuck with me and it also stuck with me that I grew up in a very religious, but more so spiritual family.

And from a spiritual side, Yoke has a metaphor in the Bible. I mean, the natural idea of a yoke is that you might have farm animals and they use this tool, which may be a yoke to help them plow something at the same time and do it more efficiently, but spiritually, the same idea kind of applies that you can rely on God to help you do something to take the load from you and you put it on him. But then also I think of it with my wife, the best decision I could have made was try to find somebody that I feel that I'm equally yoked with. So as I thought about all these things, I just wanted to say, as I build out this business, how can I focus on interrogating partnerships to the best of my ability so that I'm working with people that I feel like we can all share the load together, that our powers together from our talents, our resources, et cetera, will help us move things forward at a more accelerated pace. So that's what Yoke is.

I'll say, whenever I read the name, I think back to my grandmother making comments about being unevenly yoked. So it was nice to hear you tie back to that when you were thinking about the name. So let's go a little bit deeper into Yoke itself as a firm. Start off, you touched a little bit on this, but let's hear a little bit more about your mission statement and what y'all do.

Yeah, so Yoke seeks to use real estate as a catalyst for attractive returns and meaningful social impact. And so what do I mean by that? We focus on one, this idea of partnership. How can we partner with people that align with that mission and do so in a way that we can achieve durable, stable, resilient returns over a long-term period? How that manifests itself today is that, we've been focused on the acquisition and rehab of workforce housing and naturally occurring affordable housing. So that doesn't mean that we've been doing anything and we have not yet, but obviously at some point we want to be more diversified in our approach.

But to me that means that we haven't done anything that might be a low-income housing tax credit, affordable deal or something of some type of true government-oriented affordability covenants within it. But things that may be market rate, that may be a 1940s, '50s vintage property, that may have deferred maintenance, may be neglected. But we can acquire it at a pretty good basis, do things to the asset to improve the value by one, figuring out how we can increase the gross potential revenue in the asset, but then also we do things on the operational side to make it more streamlined, more efficient and overall increase that value.

So we do all those things on the front end. Ideally, we're able to be a long-term holder of that asset. And while we're a long-term holder, we're able to become members of the community as well, which then allows us to be in that community and figure out other strategic investments that we can make with our initial investment as the anchor. So from an investment strategy standpoint, geographically, we focus on the mid-Atlantic region. So as of today, all of our deals, everything that we own is in Washington DC proper. We want to be mid-Atlantic oriented over time have toots in Baltimore. I've been in DC for some time. Virginia is such a natural place that we could grow to next, and I really don't even think that we'll ever grow outside of the DMV. Maybe we will, but I think that it is so much opportunity just right here in that mid-Atlantic region.

I like the fact at least today, that over time, if we stay this way, I'll be able to drive 150 miles each way to a property and get to it if there's something that I need to see and lay my eyes on. From a asset class perspective, I told you a little bit about this idea of workforce housing, naturally occurring affordable housing. And then lastly, from a returns' perspective, we really focus on value-add investment opportunities, things where there is a little bit of hair on the deal, it may require some work, but we usually are boots on the ground or we figure out how with our own financing ability to create value-add that particular way as well.

Yeah, no, that's super interesting. And one thing I want to circle back to is, how do you marry the competing... Potentially not competing, forces of both wanting to generate, obviously generate the best returns, but also do that, have that social impact in the community that you talked about as you're getting started? How do you balance those approaches?

Yeah, so that is something that keeps me up at night right now. It's something I ultimately, I tend to think of, and as of today, we've been able to focus on deals that are manageable enough that the investors, the partners that I utilize all the way around are people that I've been able to work with for some time and try to better understand if we all have that same connectivity and ethos, so that we can try to achieve both of those missions simultaneously. I mean, the best example I can talk to is maybe our just first asset. We acquired a thirteen-unit building in Northeast DC and I was able to build a capital stack, one with investors who are people that I've known for years. People, I would say a lot of their investment, they probably invested more so in me rather than the deal, but I made sure that I presented them with a deal that had merits that sat on its own and another person could do in it and do well.

But then secondly, from a community standpoint, we picked a neighborhood, well, we're in a neighborhood where you can see that there's been, it's an emerging neighborhood. It's on the path of growth. Some people may say it's there, some people say it's definitely not there just yet, but there's that opportunity there for us to really be long-term holders and be a part of it for some time. And because it is manageable enough, I've been able to spend a ton of time on the property. Every resident knows my name, I know their names, I know their story a bit. And my hope is that as we scale, we have systems in place in the business so that my team continues to have that same ethos on other projects.

No, that's cool. And I think that intentionality while you're small, building that in your teams now as you scale that, hopefully we can continue that as well. You alluded to this with Covid and coming out of Covid and just everything we're seeing with interest rates. The real estate market, you picked a wonderful time and exciting time to get into real estate investing. What excites you about the prospect of real estate investing in this kind of turbulent time in that space?

Yeah, it is absolutely a turbulent time. It's turbulent because it's a time where after Covid interest rates were so low, right? Interest rates were low, you had stimulus money into the market, and you're at a time today where we have macroeconomic uncertainty. We have an election that's coming up, we have high inflation, we have all these factors that make it, and many people have said for years, are we in a recession yet? What does that look like?

So with all those different factors, it has become turbulent. What that means on the real estate side is I've seen spread right now between what sellers want for an asset and what a buyer may actually be able to purchase. And because of that spread, I think there's a great opportunity, it's a great opportunity for someone who's an emerging to come in and potentially buy an asset at a good value or a good basis and then prove out that they've been able to weather a potential cycle. I think that this is a interesting time as well because we had racial equity investments and there have been things that have created a opportunity for emerging managers to become more institutionalized and professionalized as well. And to me, I think that's helpful because now there's a community in place that you can work with and talk to during these deals. So those two things really just stand out to me right now.

Yeah, and kind of along those same lines, let's talk a little bit about what fundraising has been like for you in this time. You talked a little bit about initially going to people that knew you and were almost investing in you, but also in the good deal and just flesh that out a little bit more for us.

Yeah, so I have strategically worked with investors who I've known for some time, and as I continue to grow, I've realized that it's going to be very hard to keep that up and I'll have to figure out how to build a business appropriately in that way. So for me, fundraising is a journey and has continued to be a journey, but it's becoming an even harder or more challenging journey because of where we are in the market as well as my own ambitions for this company to grow and do more projects and larger projects over time. So fundraising has been something where I could be selective about who I talk to on a project and let them know what the deal may look like. But what I've realized as well is as inflation has increased and as money market accounts, return is a lot higher and there's safety in that, the investor expectations have increased in a tough market.

So to me, there's a ton of factors in today's market that make it somewhat very challenging to fundraise and figure out how do you grow. And I would say the last part to this is when you think about a market of uncertainty, usually as an investor, you want to go to something that's safe. So you'll go to that safer investment, which could be parking your money in savings or working with a larger investment group that just has a longer track record. And so for me, in companies like me that are at this emerging space, now you're comparing your track record and deal experience versus someone that may be considered more safe. And you just got to figure out how you get over that hurdle and what things can you do to help mitigate, I guess, the apparent risk that somebody may be seeing on the other side of the table when they look at you or look at the deal you're working on.

Yeah, that's great. And that actually leads really well into what I wanted to discuss next. So here at McGuireWoods, we are very interested in promoting the progress of Black professionals and private equity and finance and also emerging managers and folks who are thinking about these things that you are thinking about in terms of how do I de-risk the investment prospect of someone who might not have the same track record or tenure as a competitive firm, and what are the things I need to be thinking about in order to successfully execute a growth strategy as an emerging manager, and especially a Black emerging manager in real estate. And so the quote that I wanted to read from Reverend Frazier was his response when asked by the union military officials, the question, "State in what manner you think you can take care of yourselves and how you can best assist the government in maintaining your freedom?"

And Frazier's response was this, "The way we best can take care of ourselves is to have land and turn it and till it by our own labor. We want to be placed on land until we are able to buy it and make it our own." And I don't think it's an overstatement to suggest that Yoke management partners and what you.

What you're doing, Chris, is a realization of the aspiration of Reverend Frazier. You're buying land, you're very committed to doing good and doing well in your communities. Like you just said, you know your tenants, you go to your buildings, you understand their stories. And so thinking about your impact and what you aspire to do for your communities, for yourself, for the generations will come after you. What would you want our audience to know and understand about your aspirations for Yoke?

Thank you again, PJ for sharing that, that quote is one that I did not know, but it's something that I will definitely reflect on going forward because it's amazing to think that somebody was thinking then, oh wow, I'm trying to think today, which is that you can generate wealth and freedom for yourselves, by trying to take control of the opportunity that may be in front of you. And one that they were talking about is land. And I think I'm doing that same thing with trying to identify an asset that we can take control of and in the process, generate income and wealth for me and the investors that I'm working with, and ultimately as well as a really safe and quality housing unit for our residents.

So I would say what I'm trying to do at Yoke can be a metaphor for anybody and what they're trying to accomplish, which is, if you just go out there and figure out what excites you and have enough, I would call it courage is one word I would use for it, but I would say sometimes it's the idea of just insanity a bit to just say, "You know what? I'm just going to go out and put it out in the world and let the universe bring it back to me and see what happens with it."

There's a possibility for you to not only achieve whatever that material thing is, but in the process, inspire others to potentially go out and figure out what their thing is. And so to me, that's been one exciting aspect of Yoke and to me, why I'm even honored to be on this podcast and to talk to you all today because it is another piece of, I guess it's an indicator, right, that what I'm doing not only matters to my family or matters to my investors, but it matters more broadly because that demonstration can help inspire some change or spark from somebody else.

Absolutely. Well said. Continuing on the idea of sparking that inspiration for others and seeing the emergence of emerging manager programs, right? You're participating in a cohort now, McGuireWoods has our Emerging Managers Conference coming up next week where we're gathering emerging managers from all over the country to meet with LPs and help give them a platform to see greater success. And so what are some trends you're seeing in the emerging manager space that you might find encouraging, that you might find difficult? Can you speak a little bit about what it's like to be an emerging manager?

Yeah. I love the fact that there are programs. I think programs help create an ecosystem. Ecosystems are great because it's the shared knowledge, resources, insights, community you all get from it. And to me, that has been one of the most exciting things about being an emerging manager in this particular time. I look at some people in the past like Don Peebles or Daryl Carter, just names of successful managers of who've been doing it for a few decades. And to me, I always think, "Well, how did they do it? Who did they talk to? Who are they working with and talking to make sure that they were doing it the right way?" And I think the great thing about the situation of today is that by having these programs, I have five or six people that I've been able to build a relationship with, who are at a similar position to me right now, who I can talk to and just trade notes and ideas with. So that's one thing that I really love about it.

The hard part about the programs is, obviously as something becomes a little bit more professionalized, there's a lower, I guess, barrier to entry and a lower barrier to entry sometimes can be an issue when you're trying to build a business because what is the unique value proposition that you bring relative to somebody else? And so obviously, I'm excited about the fact that these programs are in place. I think that there's so much space, there's so much space in the market for all of us to succeed and to rise.

However, there has to be some acknowledgement from the large institutional LPs that exist, that they need to think about how they expand their purview and how they think about emerging managers. I think every investor has a strike box, and sometimes people's strike box is just so narrow and specific. And I guess what I would push, and what I think I'll try to do now more often, is when I'm at these events to make sure that people are not just thinking of me and the other emerging managers in my cohort, as just trying to fill up this one pot of money when there's just this broad ecosystem of actual dollars going out in real estate every single day.

Yeah, absolutely. And I think that goes back to what you were saying earlier about finding alignment and how that is fundamentally important, as more managers enter the market, as more markets become more broadly invested. And I think part of what you're doing is finding emerging domestic markets that maybe hadn't even been looked at. And that in itself is a value add for people who are looking for quality investments, but might not be looking in the right place.

And I think that is a huge reason why having managers who are diverse and come from places where private equity might not be looking or traditional LPs might not have a sense of what's going on in this community and how can we generate returns that are significant enough to make this a valuable prospect. I think that is a value add that you are absolutely bringing to the table, and it's good to see. And finding alignment with the people who are interested in identifying and investing in those emerging markets and those emerging managers is crucial. It's heartening to see the growth of it, so kudos to you on that. So I'm going to turn it over to Dan.

Chris, it's been a great talk, I've learned a lot about Yoke. I'm excited to see where your path takes you. But we always like to end each episode without talking shop. Give our audience an idea of something different and unique about the guests. And so the question we have for you is there a book that's been on your mind lately, something that you've either read recently or have been meaning to read, that really stuck with you?

Yes. So I have recently discovered on Spotify that you can actually read audiobooks. I didn't know that feature was on there. Over the past few months that I found that feature, I've really leaned into it. And one book that I've gotten through and resonated with me was 50 Cents book, Hustle Harder, Hustle Smarter, I believe is the name of it, but really good book.

I've always been fascinated with his own trajectory and even, I think the title makes a lot of sense for me today and what I've been thinking about for my own business, which is I've spent a ton of time at Yoke, boots on the ground, meeting tenants, doing things that I want to do for the ethos of the business overall. But then how do I do it smart? How do I do it in a much smarter way so that we can do this and scale it over time? So that book has been something that really has stuck with me recently. The second one, I would say hardcover book that I have right now, I'm only a few days into it, but it is called The Purpose Driven Life by Rick Warren. It's been pretty interesting to read, you're supposed to read only one chapter per day, so it's been cool.

I too have recently discovered the audiobooks on Spotify. It's a real game changer for reading while you're on the treadmill or doing something else. So that's pretty cool.

And when you're driving, it's a lifesaver on those long road trips. I wanted to throw one out there too, Dan, because I basically just referenced it, but there's a book called, Emerging Domestic Markets that I think you should check out, Chris, and it's just about the notion of domestic markets becoming viable investment opportunities in the US specifically, and finding those areas and those pockets, much like the investment theory behind Opportunity Zones, just the idea of, if we're going to take non-zero sumness in investment seriously, and create access opportunities to the pipeline for emerging and diverse managers, one way to make sure that the pie is growing is to also find these investment prospects and targets that people traditionally haven't been looking at. So again, I think what you're doing is phenomenal, and we're really grateful for you for taking the time to join us today.

Yeah, I echo that and it's been a pleasure.

Yeah, I have nothing but gratitude for you both for the time, for the wisdom, for keeping this podcast going, and even this book recommendation PJ. I'll get on it soon.

Sounds good. Yeah, and we will be in touch. We look forward to keeping you in the network and accessing the pipeline. This podcast is just one of the many ways that we look to engage with and promote Black professionals in finance and private equity, but we hope to keep you in the network and hear about how things are going, and as you see more successes, which we know you will, we'd love to help get the word out to the folks in our BPE network.

Absolutely. No, I can't wait. I'm excited to be in the network, and yeah, this has just been really, really helpful today. Thank you again for this time to just be on the platform.

Sure thing.

Thank you for joining us on this episode of Accessing the Pipeline. To learn more about today's discussion, please email bpef@mcguirewoods.com. We look forward to hearing from you. This series was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this series, you acknowledge that McGuireWoods makes no warranty, guarantee or representation as to the accuracy or sufficiency of the information featured in this installment. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This series should not be used as a substitute for competent legal advice from a licensed professional attorney in your state, and should not be construed as an offer to make or consider any investment or course of action.